WV Driller Northeast Natural Energy Grows – Fracking Petri Dish

Northeast Natural Energy (NNE) is a small-to-midsized driller headquartered in Morgantown, WV. It’s a young company, drilling its first shale well in 2013. In April 2017 MDN reported that NNE had obtained $300 million of investment from two investment firms (see WV Driller Northeast Natural Energy Gets $300M Investment). They’ve put the money to good use. NNE owns 56,000 acres of leases “in the heart of the Marcellus Fairway,” with 44,000 acres in WV and 12,000 acres in southwestern PA. The company has drilled and brought online 57 shale wells. By this time next year the company expects that number to be nearly 100. One of the most interesting things about NNE is its involvement with government and university researchers. NNE drilled several test shale wells near Morgantown. The wells are part of an ongoing laboratory experiment that measures and pokes and prods everything, in an effort to learn more about shale drilling and its impacts. NNE’s test wells are a sort of living fracking petri dish. Reams of data pour in and get analyzed. Our friends at Kallanish Energy have done a deep dive into NNE. Here is a portion of their insightful report on this young and growing driller…
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News from DUG East: Record-Breaking Wells, Long Laterals & More

One of two major Marcellus/Utica events that happens each year in Pittsburgh, Hart Energy’s DUG East Conference, was held this week. (The other is Shale Insight, held in the fall.) We’ve covered a variety of news coming out of the DUG East event. Unfortunately we could not be there in person this year. By all accounts, a lot of great information was shared. We spotted two articles from different sources that do a good job of rounding up highlights from this week’s DUG. Hart’s own Exploration & Production magazine chronicles news from Eclipse Resources, whose CEO (Ben Hulburt) says the company expects to break more lateral records this year. Dennis Degner from Range Resources also talked about long laterals, and strategy. Degner said Range balances other factors like pipeline takeaway capacity and service costs. Also appearing on the stage were smaller/private M-U operators, like Northeast Natural Energy, who also shared some great insights. Below is a good roundup of the news coming from DUG this week, from a couple of sources…
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WV Driller Northeast Natural Energy Gets $300M Investment

Northeast Natural Energy (NNE) is a midsize driller headquartered in Morgantown, WV. NNE owns 49,000 net acres of leases “in the heart of the Marcellus Fairway,” and operates 27 Marcellus wells and over 100 conventional oil and gas wells. In 2011 NNE fought Morgantown for the right to drill a couple of wells just outside the city limits (see our stories here). NNE won that fight. Yesterday two investment firms–Trioloma EIG Energy Income Fund and EIG Global Energy Partners–announced they have joined forces to infuse $300 million into NNE. Looks like a very active drilling program is just ahead for the WV driller…
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2 Rigs Reactivated – One in WV, the Other in OH

Another rumor to share–from a good source, a source we believe. Last week this same source told us that a new Utica driller was beginning operations in Tioga County, PA (see The 411 on New Driller Firing Up Rig in Tioga County, PA). The new rumor? There are two more rigs reactivating–one in West Virginia and the other in Ohio. Here’s who’s beginning to drill again…
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Morgantown Marcellus Wells Coming Online

MDN chronicled the battle earlier this year between Northeast Natural Energy and the city of Morgantown, WV over Northeast’s plan to drill two Marcellus Shale gas wells near the city. In short, the Morgantown City Council tried to ban drilling both inside and outside city limits—up to one mile outside—which would have prevented Northeast from drilling the two wells.

Morgantown attempted to use a state law which indicates cities can take such actions outside their borders if they believe there is an imminent threat to residents of the city. The ban went to court, and a judge overturned it, clearing the way for Northeast to drill.

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Morgantown Gas Wells Fracked, No Air Pollution

MDN has chronicled the attempt by Morgantown, WV to ban drilling up to one mile outside of the city line—a saga that spanned many months. In the end, a judge struck down the ban and two wells were drilled and fracked. The main concern was that fracking might somehow contaminate the city’s water supply, which comes from the nearby Monongahela River (something that did not happen). But another concern was that the fracking process might cause air pollution that would affect a nearby elementary school. It seems that fear was also unfounded:

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Morgantown, WV Update: Fracking to Begin Next Week

It seems the opposition to two Marcellus Shale gas wells being drilled outside Morgantown’s borders is petering out. Press accounts talk of “a handful” of area residents protesting outside of the drill sites this week—meaning less than a dozen, perhaps a single family, who knows?

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Morgantown Official Backpedals After Drilling Ban Overturned

It’s always interesting to watch politicians operate after a humiliating defeat. Politicians’ DNA does not allow them to simply look inward and recognize their own errors. They always look outward and blame others, or in some cases, declare the defeat was a good thing and accomplished just what they wanted all along! I refer to the situation in Morgantown, WV. In June, Morgantown City Council members voted to ban hydraulic fracturing both inside and up to one mile outside their borders (see this MDN story). This threatened a pair of Marcellus Shale wells being drilled about a mile from city lines. The result? The driller, Northeast Energy, sued the city. Last week a judge overturned the city’s ban and now hydraulic fracturing will commence (see this MDN story). All told, Northeast probably lost about a month out of their original drilling schedule (they continued drilling anyway, the ban specifically prohibited fracking and not drilling per se).

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Judge Overturns Morgantown, WV Fracking Ban

Gavel fallingFor some time now, MDN has covered the hydraulic fracturing ban passed by the city of Morgantown, West Virginia (see list of articles here). In a surprise move last Friday, the Monongalia County (WV) Circuit Court Judge Susan Tucker overturned Morgantown’s fracking ban, clearing the way for Northeast Energy to continue drilling and fracking operations about a mile outside of Morgantown city lines. Judge Tucker’s “summary judgment” is embedded below.

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Northeast Continues Drilling in Morgantown Despite Ban

The ongoing battle between Morgantown, WV and Northeast Natural Energy over two proposed gas wells located close to Morgantown continues, and gets interesting. Northeast had been working with Morgantown to address concerns that the two wells they propose to drill are close to the water intake for the city. Northeast believed everything was fine until city council voted to ban hydraulic fracturing both inside and outside of its borders—up to one mile outside (allowable under WV law). Northeast’s proposed wells are within that one mile radius, so the ban shut them down. Or did it?

According to press accounts, Northeast has just started work drilling the second Marcellus gas well and plans to start fracking the first well in September, regardless of the ban:

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Drilling Company Sues Morgantown, WV for $42 Million in Lost Investment & Lost Future Revenue

Another chapter in the ongoing saga of Morgantown, WV. For those who have not followed the story, Morgantown city council members took it upon themselves to ban hydraulic fracturing outside of the city limits—up to one mile—which they say is allowable under a West Virginia law that grants cities the right to exceed their boundaries in certain circumstances. The council members are concerned that two Marcellus gas wells that will be hydraulically fractured are too close to the city’s water supply and the risks are too great.

The drilling company, Northeast Energy, says the state DEP issued permits for those two wells and that Northeast has worked with the city every step of the way to ensure there will be no problems, and that the city at the last minute changed their tune. Northeast has sued to overturn Morgantown’s ban, and if that doesn’t work, they want compensation not only for their lost investment, but also for potential lost revenue.

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Update on Morgantown, WV Ban on Fracking Outside its Borders: You’re About to Get Sued

Morgantown, WV is about to get sued for banning hydraulic fracturing outside of its borders. As MDN previously reported (see here), the Morgantown City Council voted on June 21 to ban hydraulic fracturing within its borders and up to one mile outside of its borders. The decision has shut down an active operation for two wells being drilled by Northeast Natural Energy. WV has a law allowing cities to extend their reach up to a mile in order to carry out city functions. Many think City Council has overreached in this case.

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Morgantown, WV Bans Marcellus Drilling Outside City Limits – Driller May Sue to Recoup Investment

After a few months of heated debate, the Morgantown (WV) City Council has voted to prohibit Marcellus Shale drilling not only within their borders, but also up to a mile outside of their borders. How can they do that? There is a provision in West Virginia state code that allows cities to extend their authority up to a mile beyond their borders to carry out city functions. It is that state loophole that Morgantown has used to shut down two wells slated to be drilled.

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Nytis Exploration Sells Lease for 11,657 Acres in the PA Marcellus to Northeast Natural Energy

From a press release* dated March 11:

Northeast Natural Energy LLC (“NNE”) announced today that it has closed the acquisition of 11,657 net acres in the core of the Marcellus Shale and associated shallow conventional oil and gas wells from Nytis Exploration Company LLC and from Nytis Exploration of Pennsylvania LLC (“Nytis”), both private exploration and production companies. Financial terms were not disclosed.

“We are very pleased to establish a significant acreage position in the core of the Marcellus Shale,” said Mike John, NNE’s President. “The acreage, which is very high in quality, is located in some of the most attractive areas in the Marcellus including Armstrong, Clearfield and Westmoreland Counties, Pennsylvania. This transaction provides a platform for future bolt-on positions in the region and establishes NNE’s position as a key participant in the development of the Marcellus Shale. We look forward to drilling this acreage as we continue to evaluate many other substantial opportunities in the Marcellus.”

*Business Wire (Mar 11) – Northeast Natural Energy Acquires 11,657 Net Acres in the Marcellus Shale from Nytis Exploration Company